What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-27 compared with 2024-04-01 · 758 added, 911 removed, 531 unchanged (76% of the section changed)

5 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Balance Sheets

Statements of Comprehensive Loss

Statements of Shareholders’ Equity

Statements of Cash Flows

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

2 unchanged sentences

have audited the accompanying consolidated balance sheets of My Size, Inc.

and subsidiaries (the Company) as of December 31, 2023

and 2022, the related consolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the

years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2023, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2024 and

2023, the related consolidated statements of comprehensive loss, shareholders’ equity, and cash flows for each of the years in

the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31,

2024, in conformity with U.S.

generally accepted accounting principles.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1d to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations

and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.

Management’s plans

in regard to these matters are also described in Note 1d.

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1d to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and

has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in

regard to these matters are also described in Note 1d.

The consolidated financial statements do not include any adjustments that might

20 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

audit matter communicated below is a matter arising from the current period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or

disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or

complex judgments.

The communication of a critical audit

matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or

disclosures to which it relates.

Goodwill impairment assessment

As discussed in Notes 2j and 7 to the consolidated financial statements, the Company examines on an annual basis

whether there is an impairment of goodwill, or between annual tests in certain circumstances.

The Company performed its annual quantitative

impairment test of goodwill at the reporting unit level using the income approach.

Based on this analysis, the Company determined that

the carrying value of its SaaS Solutions reporting unit exceeded its fair value and an impairment charge of $671 thousand was recorded.

We identified the evaluation of the goodwill impairment assessment for the SaaS Solutions reporting unit as a critical

audit matter.

A high degree of subjective auditor judgment was required to evaluate the assumptions used to estimate the fair value of

the Company’s SaaS Solutions reporting unit.

Specifically, the following assumptions had limited observable inputs (i) forecasted

reporting unit cost of sales and operating expenses (ii) revenue growth rates, and (iii) discount rate.

The fair value determined was

sensitive to changes in these key assumptions.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole,

and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the

accounts or disclosures to which it relates.

impairment assessment

discussed in Notes 2i and 7 to the consolidated financial statements, the Company examines on an annual basis whether there is an impairment

of goodwill, or between annual tests in certain circumstances.

The Company performed its annual quantitative impairment test of goodwill

at the reporting unit level using the income approach.

Based on this analysis, the Company determined that the carrying value of its

SaaS Solutions reporting unit exceeded its fair value and an impairment charge of $631 thousand was recorded.

identified the evaluation of the goodwill impairment assessment for the SaaS Solutions reporting unit as a critical audit matter.

degree of subjective auditor judgment was required to evaluate the assumptions used to estimate the fair value of the Company’s

SaaS Solutions reporting unit.

Specifically, the following assumptions had limited observable inputs (i) forecasted reporting unit cost

of sales and operating expenses (ii) revenue growth rates, and (iii) discount rate.

The fair value determined was sensitive to changes

in these key assumptions.

Additionally, specialized skills and knowledge were needed to evaluate the discount rate.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design

of certain internal controls related to the Company’s goodwill impairment evaluation process.

We performed sensitivity analyses

to assess the impact of reasonably possible changes to the forecasted cost of sales and operating expenses, revenue growth rates, and

discount rate assumptions on the Company’s determination of the reporting unit’s fair value.

We evaluated the Company’s

revenue growth rates by comparing the growth projections to industry reports.

We compared the Company’s historical forecasted revenue,

cost of sales, and operating expenses to historical actual results to assess the Company’s ability to accurately forecast cash flows.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate

by assessing the Company’s inputs to the discount rate as compared to publicly available data for comparable entities.

following are the primary procedures we performed to address this critical audit matter.

We evaluated the design of certain internal

controls related to the Company’s goodwill impairment evaluation process.

We performed sensitivity analyses to assess the impact

of reasonably possible changes to the forecasted cost of sales and operating expenses, revenue growth rates, and discount rate assumptions

on the Company’s determination of the reporting unit’s fair value.

We evaluated the Company’s revenue growth rates

by comparing the growth projections to industry reports.

We compared the Company’s historical forecasted revenue, cost of sales,

and operating expenses to historical actual results to assess the Company’s ability to accurately forecast cash flows.

valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate by assessing

the Company’s inputs to the discount rate as compared to publicly available data for comparable entities.

Somekh Chaikin

1 unchanged sentence

have served as the Company’s auditor since 2017.

April 1, 2024

AND ITS SUBSIDIARIES

1 unchanged sentence

dollars in thousands (except share data)

and cash equivalents

receivables and prepaid expenses

current assets

Cash and cash equivalents

Restricted cash

Sort term deposit

Account receivables

Other receivables and prepaid expenses

Total current assets

Long term deposits

Property and equipment, net

Operating right-of-use asset

Intangible assets

Investment in JV

Investment in marketable securities

term deposits

and equipment, net

right-of-use asset

in marketable securities

Total non-current assets

Liabilities and shareholders’ equity

and shareholders’ equity

lease liability

overdraft and short-term loans

to Related parties

current liabilities

Operating lease liability

Bank overdraft and short-term loans

Trade payables

Liabilities to Related parties

Other payables

Total current liabilities

Long-term loans

Deferred tax liabilities

Operating lease liability

Total non-current liabilities

CONTINGENCIES AND COMMITMENTS

Total Liabilities

Shareholders’ equity

Stock capital -

Common stock of $ 0.001 par value - Authorized:

lease liability

non-current liabilities

CONTINGENCIES

AND COMMITMENTS

Shareholders’

stock of $ 0.001 par value - Authorized:

250,000,000 shares as of December 31,2024 and 2023;

Issued and outstanding:

3,621,792 and 1,464,117 as of December 31,2023 and 2022, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total shareholders’ equity

Total liabilities and shareholders’ equity

2,040,159 and

452,724 (*) as of December 31,2024 and 2023, respectively

paid-in capital

other comprehensive loss

shareholders’ equity

liabilities and shareholders’ equity

to give retroactive effect of 1:8 reverse stock split effected in April 2024, see note 13 (b)

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

dollars in thousands (except share data and per share data)

Cost of revenues

ended December 31,

and development

and marketing

and administrative

operating expenses

Research and development

Sales and marketing

General and administrative

Impairment of goodwill

Total operating expenses

Operating loss

Financial income (expense), net

Equity loss of equity method investees

Loss before income taxes

Income tax benefit

Net loss for the year

Other comprehensive income (loss):

Foreign currency translation differences

Total comprehensive loss

Basic and diluted loss per share

Basic and diluted weighted average number of shares outstanding

income (expense), net

loss of equity method investees

before income taxes

loss for the year

comprehensive income (loss):

currency translation differences

comprehensive loss

and diluted loss per share

and diluted weighted average number of shares outstanding

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

dollars in thousands (except share data)

other comprehensive

comprehensive

stockholders’

as of December 31, 2021

compensation related to options and restricted shares granted to employees and consultants

of shares in Business Combination (*) (**)

of shares post Business Combination ( * )

of reverse stock split (Note 10 (b)

comprehensive income (loss)

as of December 31, 2022

compensation related to options and restricted shares granted to employees and consultants

of shares, net of issuance cost of $ 959

of Exercise of warrants and prefunded warrants

comprehensive income (loss)

as of December 31, 2023

Balance as of December 31, 2022

Stock-based compensation related to options

and restricted shares granted to employees and consultants

Issuance of shares, net of issuance cost of $ 959

Issuance of Exercise of warrants and prefunded

Total comprehensive income

Balance as of December 31, 2023

Stock-based compensation related to options

and restricted shares granted to employees and consultants

Issuance of shares for sellers post Business

Effect of reverse stock split

Issuance of shares, net of issuance cost of $ 442

Exercise of shares in abeyance

Exercise of Warrants

Total comprehensive income

Balance as of December 31, 2024

an amount of less than $1.

to give retroactive effect of 1:8 reverse stock split effected in April 2024, see note 13 (b).

accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

dollars in thousands

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Change in operating lease right-of-use asset

Amortization of intangible assets

foreign exchange differences

Change in liabilities to related parties

Interest on long term liabilities

Interest paid

Revaluation of investment in marketable securities

Deferred tax benefits

Change in Investment in JV

Stock based compensation

Change in inventory

Impairment of goodwill

Change in account receivables

Changes in operating lease liabilities

Change in other receivables and prepaid expenses

Change in trade payables

Change in other payables

Net cash used in operating activities

Cash flows from investing activities:

Acquisition of a subsidiary, net of cash acquired

investing in other receivable

Investment in equity accounted investee

Purchase of property and equipment

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of shares, net of issuance costs

Repayment of loans

Net cash (used in) provided by financing activities

Effect of exchange rate fluctuations on cash and cash equivalents

Change in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at the beginning of the year

Cash and cash equivalents and restricted cash at the end of the year

ended December 31,

flows from operating activities:

to reconcile net loss to net cash used in operating activities:

on Disposal of property and equipment

in operating lease right-of-use asset

of intangible assets

exchange differences

in liabilities to related parties

on long term liabilities

of investment in marketable securities

in Investment in JV

based compensation

in account receivables

in operating lease liabilities

in other receivables and prepaid expenses

in trade payables

in other payables

cash used in operating activities

flows from investing activities:

from short term deposits

from liquidating JV

of property and equipment

cash (used in) provided by investing activities

flows from financing activities:

from issuance of shares, net of issuance costs and exercise of warrants

cash provided by financing activities

of exchange rate fluctuations on cash and cash equivalents

in cash and cash equivalents and restricted cash

and cash equivalents and restricted cash at the beginning of the year

and cash equivalents and restricted cash at the end of the year

Non cash activities:

Change in operating lease right-of-use asset and liability due to termination of the lease agreement

AND ITS SUBSIDIARIES

2 unchanged sentences

is developing unique measurement technologies based on algorithms with applications

in a variety of areas, from the apparel e-commerce market, to the courier services market

and to the Do It Yourself (“DIY”) smartphone and tablet apps market.

focused on the apparel e-commerce market.

The technology

1 unchanged sentence

in a variety of novel ways.

the acquisition of Naiz Fit Bespoke Technologies, S.L (“Naiz”) in October 2022 (see note 16), the Company expanded

its offering outreach and customer base.

the acquisition of Naiz Fit Bespoke Technologies, S.L (“Naiz”) in October 2022, the Company expanded its offering outreach

and customer base.

the acquisition of Orgad International Marketing Ltd.

(“Orgad”) in February 2022 (see note 16), the Company also operates

an omnichannel e-commerce platform.

Company has six subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., Orgad and

Rotrade Ltd all of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation and Naiz

Bespoke Technologies, S.L., a limited liability company incorporated under the laws of Spain (see note 16).

References to the

Company include the subsidiaries unless the context indicates otherwise.

(“Orgad”) in February 2022, the Company also operates an omnichannel

e-commerce platform.

Company has six subsidiaries, My Size Israel 2014 Ltd (“My Size Israel”), Topspin Medical (Israel) Ltd., Orgad and Rotrade

Ltd all of which are incorporated in Israel, My Size LLC which was incorporated in the Russian Federation and Naiz Bespoke Technologies,

S.L., a limited liability company incorporated under the laws of Spain.

References to the Company include the subsidiaries unless

the context indicates otherwise.

Size, Inc., was incorporated and commenced operations in September 1999, as Topspin Medical Inc.

6 unchanged sentences

in the field of cardiology and urology.

September 1, 2005 to March 27, 2024, the Company’s common stock traded on the Tel Aviv Stock Exchange

in October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.

Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel.

These attacks resulted in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians and soldiers.

Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign against Hamas and other terrorist organizations in parallel to their continued rocket and terror attacks.

The Company cannot currently predict the intensity or duration of Israel’s war against Hamas, nor can predict how this war will ultimately affect the Company’s business and operations or Israel’s economy in general.

The war with Hamas has had an immaterial effect on

its operations and financial results so far.

This is attributable to its global footprint and the offices in Spain which has become a

hub for the Company’s sizing solutions business.

The majority of Orgad’s inventory utilizes fulfillment by Amazon rather than

fulfilling directly.

Inventory is now maintained and orders are shipped from regional Amazon warehouses, thereby reducing exposure to

inventory risk and contributing to operating efficiencies.

October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip

and conducted a series of attacks on civilian and military targets.

Hamas also launched extensive

rocket attacks on the Israeli population and industrial centers located along Israel’s

border with the Gaza Strip and in other areas within the State of Israel.

These attacks resulted

in thousands of deaths and injuries, and Hamas additionally kidnapped many Israeli civilians

and soldiers.

Following the attack, Israel’s security cabinet declared war against

Hamas and commenced a military campaign against Hamas and other terrorist organizations in

parallel to their continued rocket and terror attacks.

war with Hamas has had an immaterial effect on its operations and financial results so far.

This is attributable to its offices in Spain which has become a hub for the Company’s sizing solutions business.

The majority of Orgad’s

inventory utilizes fulfillment by Amazon rather than fulfilling directly.

Inventory is now maintained and orders are shipped from

regional Amazon warehouses, thereby reducing exposure to inventory risk and contributing to operating efficiencies.

On January 19, 2025, a temporary ceasefire went into effect, the result of which is uncertain.

February 24, 2022, Russia invaded Ukraine.

The outbreak of hostilities between the two countries could result in more widespread conflict

and could have a severe adverse effect on the region.

Following Russia’s actions, various countries, issued broad-ranging economic

sanctions against Russia.

Such sanctions included, among other things, a prohibition on doing business with certain Russian companies,

officials and oligarchs;

a commitment by certain countries and the European Union to remove selected Russian banks from the Society for

Worldwide Interbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally;

and restrictive measures

to prevent the Russian Central Bank from undermining the impact of the sanctions.

The Company shut down its operation in Russia and expect to close down the subsidiary in the near future therefore

the impact from current situation is very limited.

The hostilities between the two countries could result in more widespread

conflict and could have a severe adverse effect on the region.

Following Russia’s actions, various countries, issued broad-ranging

economic sanctions against Russia.

Such sanctions included, among other things, a prohibition on doing business with certain Russian

companies, officials and oligarchs;

a commitment by certain countries and the European Union to remove selected Russian banks from

the Society for Worldwide Interbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally;

and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions.

Company shut down its operation in Russia and expects to close down the subsidiary in the near future therefore the impact from current

situation is very limited.

AND ITS SUBSIDIARIES

2 unchanged sentences

1 - GENERAL (Cont.)

July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital Market under the symbol “MYSZ”.

The Company’s shares of common stock are listed both on the Nasdaq Capital Market and TASE.

July 25, 2016, the Company’s common stock began publicly trading on the Nasdaq Capital

Market under the symbol “MYSZ”.

September 1, 2005 to March 27, 2024, the Company’s common stock was traded on the Tel Aviv Stock Exchange.

inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of

2 unchanged sentences

foreseeable future.

Based on the projected cash flows and cash balances as of December 31, 2023, management is of the opinion that its

existing cash will be sufficient to fund operations for a period less than 12 months.

As a result, there is substantial doubt about the

Company’s ability to continue as a going concern.

plans include the continued commercialization of the Company’s products and acquisition of technology, intellectual property

or businesses and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from

strategic partnerships.

Additional funds may not be available when the Company needs them, on terms that are acceptable to it, or at

If the Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to cease

financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the

Company fail to operate as a going concern.

1, July 2023 the Company merged its two SAAS segments into one segment, hence reducing the reportable segments from three to the

following two segments:

(i) fashion and equipment e-commerce platform, and (ii) SaaS based innovative artificial intelligence driven

measurement solutions.

This realignment reflects the way resources are allocated and performance is assessed by the Chief Operating

Decision Maker.

The fashion and equipment e-commerce platform which represents Orgad’s activity that was acquired by the Company

in 2022, mainly operates on Amazon.

The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS Solutions

operating segment consists of My Size Inc, My Size Israel, My Size LLC and Naiz.

the Company’s financial reporting for December 31, 2023, comparative information for 2022 in the operating segment note was

restated to reflect the changes in reportable segments.

Based on the projected cash flows and cash balances as of the date of these financial statements, management is

of the opinion that there is an uncertainty that its existing cash will be sufficient to fund operations for a period of more than

As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

plans include the continued commercialization of the Company’s products and acquisition of technology, intellectual property or

businesses and securing sufficient financing through the sale of additional equity securities, debt or capital inflows from strategic

partnerships.

Additional funds may not be available when the Company needs them, on terms that are acceptable to it, or at all.

Company is unsuccessful in commercializing its products and securing sufficient financing, it may need to cease operations.

The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should

the Company fail to operate as a going concern.

2 - SIGNIFICANT ACCOUNTING POLICIES

10 unchanged sentences

impairment of non-financial assets

The Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant

and equipment that are allocated to reporting units, in accordance with the accounting policy presented in Note 1 (h) below.

value calculations of reporting units require the use of estimates.

Company examines on an annual basis whether there is an impairment of goodwill, intangibles and property, plant and equipment that are

allocated to reporting units, in accordance with the accounting policy presented in Note 1 (h) below.

The fair value calculations of

reporting units require the use of estimates.

information on key assumptions used in calculation of the fair value, see NOTE 7 – Goodwill and other Intangible assets.

Functional currency:

currency of the primary economic environment in which the operations of the Company is conducted is the United States Dollar and thus

currency of the primary economic environment in which the operations of the Company is conducted is the U.S.

Dollar and thus

it is the Company’s functional currency.

The reporting currency according to which these financial statements are prepared is the

currency of the primary economic environment in which the operation of the Subsidiary, My Size Israel and Orgad International Marketing

currency of the primary economic environment in which the operation of the subsidiaries, My Size Israel and Orgad International Marketing

functional currency is the New Israeli Shekel (“NIS”).

currency of the primary economic environment in which the operation of the Subsidiary, My Size LLC, functional currency is Russian Ruble.

currency of the primary economic environment in which the operation of the Subsidiary, Naiz fit, functional currency is Euro.

currency of the primary economic environment in which the operation of the subsidiary, My Size LLC, functional currency is the

Russian Ruble.

currency of the primary economic environment in which the operation of the subsidiary, Naiz fit, functional currency is the

AND ITS SUBSIDIARIES

11 unchanged sentences

cash are deposits for rent, credit card and for hedging activities.

Inventories :

are measured at the lower of cost or net realizable value.

4 unchanged sentences

do not result in the restoration or increase in that newly established cost basis.

The costs of purchase of inventories comprise the purchase price and other costs directly

attributable to the acquisition of finished goods.

Net realizable value is the estimated selling price in the ordinary course of business.

At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and

circumstances do not result in the restoration or increase in that newly established cost basis.

In 2023, the company recorded an inventory

mark-down of $ 39 .

The costs of purchase of inventories comprise the

purchase price and other costs directly attributable to the acquisition of finished goods.

Net realizable value is the estimated selling

price in the ordinary course of business.

At the point of the loss recognition, a new, lower-cost basis for that inventory is established,

and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

In 2024 and 2023, the company recorded an inventory mark-down of $ 30 and $ 39 respectively.

Property and equipment:

15 unchanged sentences

which the carrying amount of the assets exceeds the fair value of the assets.

During the periods ended December 31, 2023 and 2022, no impairment losses have been

Business combinations :

Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration

to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

When determining the fair values of assets acquired and liabilities assumed, the Company estimated the future expected cash flows from

acquired platform, customer relationships, Technology and trademark from a market participant perspective, useful lives and discount

In addition, management makes significant estimates and assumptions, which are uncertain, but believed to be reasonable.

Acquisition-related

costs are recognized separately from the acquisition and are expensed as incurred.

AND ITS SUBSIDIARIES

8 unchanged sentences

reporting unit with it carrying value.

350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill

impairment test.

If the qualitative assessment does not result in a more likely than not indication of impairment, no further

impairment testing is required.

If it does result in a more likely than not indication of impairment, the impairment test is

Goodwill is not deductible for income tax purposes.

Goodwill from the Orgad acquisition was allocated to the fashion and

equipment e-commerce platform segment and goodwill from Naiz acquisition was allocated to the Naiz segment based innovative

artificial intelligence driven measurement solutions.

350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment

If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing

If it does result in a more likely than not indication of impairment, the impairment test is performed.

Goodwill is not

deductible for income tax purposes.

Goodwill from the Orgad acquisition was allocated to the fashion and equipment e-commerce platform

segment and goodwill from Naiz acquisition was allocated to the Naiz segment based innovative artificial intelligence driven measurement

Alternatively,

1 unchanged sentence

of the goodwill impairment test.

Impairment charge of $ 671 as the carrying value of SaaS Solution reporting segment exceeded its expected fair value,

as determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates.

impairment charge was recorded within Impairment of goodwill, within the Consolidated Statement of Operations, and within the Entertainment

segment for the year ended December 31, 2023.

impairment charges of $ 631 and $ 671

were recorded as the carrying value of the SaaS Solution reporting segment exceeded its expected fair value, as determined using a

discounted cash flow model which is primarily based on management’s future revenue and cost estimates.

These impairment charges

were recorded within the Consolidated Statement of Operations and within the SaaS Solution segment for

the year ended December 31, 2024 and 2023 respectively.

See Note 7- Goodwill.

Intangible assets:

13 unchanged sentences

Severance pay:

Subsidiary’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law (“Section 14”).

Under Section 14, employees in Israel are entitled to have monthly deposits, at a rate of 8.33 % of their monthly salary, made on their

behalf to their insurance funds.

Payments in accordance with Section 14 exempt the Subsidiary from any additional obligation for these

As a result, the Subsidiary does not recognize any liability for severance pay due to these employees and the deposits under

Section 14 are not recorded as an asset in the Subsidiary’s balance sheet.

These contributions for compensation represent defined

contribution plans and expenses are recorded based on actual deposits.

My Size Israel’s liability for severance pay is covered by Section 14 of the Israeli Severance Pay Law

(“Section 14”).

Under Section 14, employees in Israel are entitled to have monthly deposits, at a rate of 8.33 %

of their monthly salary, made on their behalf to their insurance funds.

Payments in accordance with Section 14 exempt My Size Israel

from any additional obligation for these employees.

As a result, My Size Israel does not recognize any liability for severance pay

due to these employees and the deposits under Section 14 are not recorded as an asset in its balance sheet.

contributions for compensation represent defined contribution plans and expenses are recorded based on actual deposits.

AND ITS SUBSIDIARIES

6 unchanged sentences

wages, related expenses and subcontractors.

Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based

applications used to deliver our services.

The Company capitalize development costs related to these software applications once the preliminary

project stage is complete and it is probable that the project will be completed and the software will be used to perform the function

Costs capitalized for developing such software applications were not material for the periods presented and therefore were not

development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to

deliver our services.

The Company capitalizes development costs related to these software applications once the preliminary project stage

is complete and it is probable that the project will be completed and the software will be used to perform the function intended.

capitalized for developing such software applications were not material for the periods presented and therefore were not capitalized.

Income taxes:

6 unchanged sentences

The Company establishes a valuation allowance, if necessary, to reduce deferred tax assets to the amount more likely than not to be realized.

As of December 31, 2023, and 2022, a valuation allowance was established by the Company.

to reduce the deferred tax assets to

the amount supported by future reversals of existing taxable temporary differences.

As of December 31, 2023, and 2022, a valuation allowance was established by the Company to reduce the deferred tax assets to the amount

supported by future reversals of existing temporary taxable differences.

Company implements a two-step approach to recognize and measure the benefit of its tax positions.

1 unchanged sentence

position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely

than not that, on an evaluation of the technical merits, the tax position will be sustained on examination, including resolution of any related

appeals or litigation processes.

The second step is to measure the tax benefit as the largest amount that is greater than 50 percent

(cumulative basis) likely to be realized upon settlement.

The Company believes that its tax positions are all highly certain of being

upheld upon examination.

than not that, on an evaluation of the technical merits, the tax position will be sustained on examination, including resolution of any

related appeals or litigation processes.

The second step is to measure the tax benefit as the largest amount that is greater than 50

percent (cumulative basis) likely to be realized upon settlement.

The Company believes that its tax positions are all highly certain

of being upheld upon examination.

As such, as of December 31, 2024 and 2023 the Company has not recorded any unrecognized tax benefits.

38 unchanged sentences

based on inputs that are unobservable and significant to the overall fair value measurement.

Company holds share certificates in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly-traded

Company holds shares in iMine Corporation (“iMine”) formerly known as Diamante Minerals, Inc., a publicly-traded

company on the OTCQB.

39 unchanged sentences

non-cancelable and do not contain refund-type provisions.

The Company also sells products directly to customers

mainly through its online Amazon stores.

Under the Company ’ s

standard contract terms, customers have a right of return within 30 until 90 days.

For contracts with rights of return, the Company recognizes

revenue based on the amount of the consideration which the Company expects to receive for products which are not expected to be returned

and recognizes a refund liability for the amount not expected to be received.

At the end of each reporting period, the Company updates

its estimates of expected product returns and adjusts the refund liabilities with a corresponding adjustment in revenues.

recorded an allowance for returns in the amounts of $ 260 thousand and $ 161 thousand as of December 31, 2023, and 2022, respectively.

allowance for returns is recorded as decrease in revenues against other payables.

Company also sells products directly to customers mainly through its online Amazon stores.

the Company’s standard contract terms, customers have a right of return within 30 until 90 days.

For contracts with rights of return,

the Company recognizes revenue based on the amount of the consideration which the Company expects to receive for products which are not

expected to be returned and recognizes a refund liability for the amount not expected to be received.

At the end of each reporting period,

the Company updates its estimates of expected product returns and adjusts the refund liabilities with a corresponding adjustment in revenues.

The Company recorded an allowance for returns in the amounts of $ 164 thousand and $ 260 thousand as of December 31, 2024, and 2023, respectively.

The allowance for returns is recorded as decrease in revenues against other payables.

Company maintains a returns policy that allows its customers to return product within a specified period of time.

22 unchanged sentences

Company accounts for its derivative instruments as either assets or liabilities and measures them at fair value through profit or loss.

Company leases include an office space lease agreement for 36 months, with an option to extend for an additional 36 months and 36 months

cancelable operating lease agreements on behalf of personnel vehicles.

The lease term includes a non-cancellable period of the lease

plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably

certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

Company leases include an office space lease agreement for 12 months, with an option to extend for an additional 12 months and 36

months cancelable operating lease agreements on behalf of personnel vehicles.

The lease term includes a non-cancellable period of

the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company

is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation

2 unchanged sentences

the present value of lease payments over the lease term.

The company generally use its incremental borrowing rate based on the estimated

The Company generally uses its incremental borrowing rate based on the estimated

rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

4 unchanged sentences

fixed payments, owed over the lease term.

Impact of recently issued accounting standards

In June 2016, the FASB issued

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”,

which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing a methodology

that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform

credit loss estimates.

Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates to clarify

implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance.

As an Emerging Growth Company,

ASU 2016-13 is effective for fiscal years beginning after December 15, 2022.

In June 2022, the FASB issued ASC 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual

Sale Restrictions”.

The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of

the unit of account of the equity security and, therefore, is not considered in measuring its fair value.

The ASU also clarifies that

an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The ASU also introduces new disclosure

requirements for equity securities subject to contractual sale restrictions.

As an Emerging Growth Company, the ASU is effective for fiscal

years beginning after December 15, 2024, and interim periods within those fiscal years.

Recent adopted accounting pronouncements

June 2022, the FASB issued ASC 2022-03 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”.

The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account

of the equity security and, therefore, is not considered in measuring its fair value.

The ASU also clarifies that an entity cannot,

as a separate unit of account, recognize and measure a contractual sale restriction.

The ASU also introduces new disclosure requirements

for equity securities subject to contractual sale restrictions.

The ASU is effective for fiscal years

beginning after December 15, 2024, and interim periods within those fiscal years.

Early adoption is permitted for both interim and

annual financial statements that have not yet been issued or made available for issuance.

The Company is currently evaluating the effect

that ASU 2022-03 will have on its consolidated financial statements and related disclosures.

In December, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure

of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies

other income tax-related disclosures.

The ASU will be effective for fiscal years beginning after December 15, 2024, and allows adoption

on a prospective basis, with a retrospective option.

The adoption of ASC 2022-03 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

December, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income

taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income

tax-related disclosures.

The ASU will be effective for fiscal years beginning after December 15, 2024, and allows adoption on a prospective

basis, with a retrospective option.

The Company is in the process of assessing the impacts and method of adoption.

ASU will impact the Company’s income tax disclosures, but not Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, Segment

Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, This guidance expands public entities’ segment disclosures

primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and

included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items,

and interim disclosures of a reportable segment’s profit or loss and assets which updates reportable segment disclosure requirements

primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after

December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

This ASU will

impact the Company’s income tax disclosures, but not Consolidated Financial Statements.

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, This guidance

expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly

provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and

description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and

assets which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal

years beginning after December 15, 2024.

The amendments were applied retrospectively to all prior

periods presented in the financial statements.

the Company adopted ASU 2023-07 in 2024, see

Note 16—Segment Reporting.

Recently issued not yet adopted accounting pronouncements

In March 2024, the SEC adopted new rules relating to the disclosure of a range of climate-change-related physical and transition risks,

data, and opportunities.

The adopted rule contains several new disclosure obligations, including, (i) disclosure on how the board of directors

and management oversee climate-related risks and certain climate-related governance items, (ii) disclosure of information related to a

registrant’s climate-related targets, goals, and/or transition plans, and (iii) disclosure on whether and how climate-related events

and transition activities impact line items above a threshold amount on a registrant’s consolidate financial statements, including

the impact of the financial estimates and the assumptions used.

This new rule will be effective in the Company’s annual disclosures

starting from the year ending December 31, 2027.

The Company is in the process of assessing the impact on its consolidated financial statements

and disclosures.

November 2024, the FASB issued ASU No.

2024-03 Income Statement—Reporting Comprehensive

Income—Expense Disaggregation Disclosures (Subtopic 220-40).

The ASU improves the disclosures

about a public business entity’s expenses and provides more detailed information about

the types of expenses in commonly presented expense captions.

The amendments require that

at each interim and annual reporting period an entity will, inter alia, disclose amounts

of purchases of inventory, employee compensation, depreciation and amortization included

in each relevant expense caption (such as cost of sales, SG&A and research and development).

The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods

within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments

should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating this

ASU to determine its impact on the Company’s segment disclosures.

In March 2024, the SEC adopted new rules relating to the disclosure of a range of climate-hange-related physical and

transition risks, data, and opportunities.

The adopted rule contains several new disclosure obligations, including, (i) disclosure on

how the board of directors and management oversee climate-related risks and certain climate-related governance items, (ii) disclosure

of information related to a registrant’s climate-related targets, goals, and/or transition plans, and (iii) disclosure on whether

and how climate-related events and transition activities impact line items above a threshold amount on a registrant’s consolidate

financial statements, including the impact of the financial estimates and the assumptions used.

This new rule will be effective in the

Company’s annual disclosures starting from the year ending December 31, 2027.

The Company is in the process of assessing the impact

on its consolidated financial statements and disclosures.

The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

AND ITS SUBSIDIARIES

4 unchanged sentences

OF CASH AND CASH EQUIVALENT BALANCE

New Israeli Shekels

Israeli Shekels

Cash and cash equivalents

1 unchanged sentence

OF OTHER RECEIVABLES AND PREPAID EXPENSES

Prepaid expenses and other current assets

Government authorities

(*) the loan was given

by the Company to a third party in March 2023 and bears annual interest of 9 % per annum.

The maturity date of the loan is December 31,2024.

expenses and other current assets

reimbursement

loan was given by the Company to a third party in March 2023 and bears annual interest of 9 % per annum.

The maturity date of the

loan was December 31,2024.

The loan was paid in full on December 16, 2024.

5 - PROPERTY AND EQUIPMENT, NET

OF PROPERTY AND EQUIPMENT, NET

Balance as at January 1, 2022

Business combination

Translation adjustments

Balance as at December 31, 2022

Balance as at January 1, 2023

Translation adjustments

Balance as at December 31, 2023

Accumulated Depreciation

Balance as at January 1, 2022

Translation adjustments

Balance as at December 31, 2022

Balance as at January 1, 2023

Translation adjustments

Balance as at December 31, 2023

Carrying amounts

as at January 1, 2023

as at December 31, 2023

as at December 31, 2024

as at January 1, 2023

as at December 31, 2023

as at December 31, 2024

at December 31, 2023

at December 31, 2024

AND ITS SUBSIDIARIES

2 unchanged sentences

August 2019, the Company entered into an office space lease agreement.

lease term is for 36

lease term was for 36

months beginning on August 20, 2019 and ending on August

1 unchanged sentence

to extend for an additional 36 months .

The Company extended the lease period until August 20, 2025.

January 8, 2024 the Company provided a notice of six month termination to the lessor

that the lease will end on July 8,2024.

Monthly rent payments including utilities amounting to approximately USD 14

During 2022, the Company extended the lease period until August 20, 2025.

8, 2024 the Company provided a six month notice termination to the lessor that the lease will end on July 8, 2024.

As a result the

Company reduced its “Right of use asset” against current liabilities as “Operating lease liability” and in

the non-current liabilities as “Operating lease liability – long term” on the Company’s December 31, 2024

consolidated balance sheets in an amount of $ 181 .

In August 2024, the Company entered into a new office space lease agreement.

The lease term is for 12 months beginning on July 1, 2024 and ending on June 30, 2025, with an option to extend for an additional 12 months.

rent payments for the previous office space including utilities amounted to approximately USD 14

(NIS 49,500 )

For the new office space the monthly rent payments including utilities amounted to approximately $ 2

addition, the Company entered into a three-year cancelable operating lease agreement for cars.

4 unchanged sentences

liabilities as “Operating lease liability - long term” on the Company’s December 31, 2024 consolidated balance

As of December 31, 2023, right-of-use of asset was $ 351 .

As of December 31, 2024, right-of-use of asset was $ 23 based on the extension of the lease period ( 24 months in total).

Operating lease liabilities were $ 15

and non current operating lease liabilities were $ 8 .

Right-of-use asset includes the capitalization of improvements (net of amortization) amounting to $ 63 .

the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present

3 unchanged sentences

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

Less imputed interest:

Total lease liabilities

imputed interest:

lease liabilities

AND ITS SUBSIDIARIES

5 unchanged sentences

OF GOODWILL AND INTANGIBLE ASSETS

Selling Platform

Customer Relationships

As of January 1, 2022

Acquisitions through business combinations

Effect of changes in exchange rates

As of December 31, 2022

Relationships

of January 1, 2023

of changes in exchange rates

of December 31, 2023

of changes in exchange rates

of December 31, 2024

Goodwill and intangible assets, Cost, beginning

Effect of changes in exchange rates

As of December 31, 2023

Goodwill and intangible assets, Cost, ending

As of January 1, 2022

Amortization for the year

Effect of changes in exchange rates

As of December 31, 2022

Goodwill and intangible assets, Amortization, beginning

Amortization for the year

Effect of changes in exchange rates

As of December 31, 2023

Goodwill and intangible assets, Amortization, ending

Carrying amount

As of December 31, 2022

As of December 31, 2023

Goodwill and intangible assets, Carrying amount, ending

of January 1, 2023

of changes in exchange rates

of December 31, 2023

of changes in exchange rates

of December 31, 2024

Goodwill and intangible assets, Amortization, ending balance

of December 31, 2023

of December 31, 2024

and intangible assets, Carrying amount, ending balance

expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:

OF AMORTIZATION EXPENSES INTANGIBLE ASSETS

Selling platform

Costs of revenues

Sales and marketing

Costs of revenues

Customer relationships

Sales and marketing

Total amortization expenses

and marketing

relationships

and marketing

amortization expenses

amortization expenses are expected to be as follows:

OF FUTURE AMORTIZATION EXPENSES

Future amortization expenses

amortization expenses

the fourth quarter of 2024, the Company performed the annual assessment of the useful life of its finite-lived intangibles.

updated the useful life of its technology intangibles as a result of analyzing recent quantitative and qualitative observations

in the market and factors impacting our business.

The change in estimate will be accounted for prospectively.

weighted average remaining life was increased from approximately 3 years to 7 years to reflect the new estimated useful lives.

estimates that there will be an approximately 55 - 60 % decrease to annual amortization expense.

changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows:

Fashion and equipment e-commerce platform

Balance as of December 31, 2021

Changes during the period:

Goodwill acquired

Goodwill impairment

Translation differences

Balance as of December 31, 2022

Translation differences

Goodwill impairment

Balance as of December 31, 2023

as of December 31, 2022

as of December 31, 2023

as of December 31, 2024

Company operates its business through two reporting segments:

1 unchanged sentence

artificial intelligence driven measurement solutions See Note 16 for additional segment information.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share data and per share data)

7 – Goodwill and other Intangible assets (Cont.)

Company determines the fair value of its reporting units using the income approach.

5 unchanged sentences

average cost of capital (“WACC”), adjusted for the relevant risk associated with business-specific characteristics.

Goodwill impairment in 2023

Company performed a quantitative assessment as of December 31, 2023 for the reporting units’ fair value.

The estimated fair value

of the Fashion and equipment e-commerce platform reporting unit exceeded its estimated carrying amount by 16.8 %

charge of $ 671 as the carrying value of SaaS Solution reporting segment exceeded its expected fair value, as determined using a discounted

cash flow model which is primarily based on management’s future revenue and cost estimates.

This impairment charge was recorded

within Impairment of goodwill, within the Consolidated Statement of Operations, and within the SaaS based innovative artificial intelligence driven measurement solutions segment for the year ended

December 31, 2023.

Based on the December 31, 2023 revised

discounted cash flows analysis, the Company recorded a goodwill impairment of $ 671 to its SaaS Solution reporting unit.

based the following assumptions:

OF ESTIMATED FAIR VALUE

and equipment e-commerce platform

No goodwill impairment

was recorded for the Fashion and equipment e-commerce platform reporting unit.

Goodwill impairment

the third quarter of 2024, the Company has experienced sustained decreases in the

Company’s share price and a decline in actual and forecasted operating results, prompting impairment assessments of goodwill

and long-lived assets including definite-lived intangibles.

Company updated the forecasted future cash flows used in the impairment assessment, including revenues, margin, and capital expenditures

to reflect current conditions.

Other changes in valuation assumptions included selection of lower revenue growth rates based upon an

assessment of current market conditions.

Considering the adverse

developments in its businesses which are described above, the Company recorded a goodwill impairment of $ 631 in the third quarter, which

was attributable to the entire remaining goodwill associated with its SaaS solutions segment (level 3 fair value measurement).

The resulting cash flow

for the SaaS based innovative artificial intelligence driven measurement solutions reporting unit amounts were discounted using the same

rate of 25 % compared to prior quarters, the Company used revenue growth rate of 4 %- 32 % compared to 15 %- 70 % at December 2023.

still assumed a terminal growth rate of 3 %.

the tests performed in September 30, 2024, the resulting cash flow for the fashion and equipment e-commerce platform segment amounts

were discounted using a slightly increased rate of 22 %

compared to 21.5 %

in prior quarters, The Company used a revenue growth rate of 7.5 % - 36.5 %

compared to 12.4 % - 50 %

at December 2023.

The Company still assumed a terminal growth rate of 3 % .

No goodwill impairment was recorded for this reporting unit.

Company performed it annual quantitative assessment as of December 31, 2024 for the fashion and equipment e-commerce platform reporting unit fair value.

The estimated fair value of the fashion and equipment e-commerce platform reporting unit exceeded its estimated carrying amount by 5 % .

This was based on the following assumptions:

Fashion and equipment e-commerce platform

2 unchanged sentences

Revenue growth rate

business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s

reporting units in the future.

7.5 % - 65.6 %

AND ITS SUBSIDIARIES

6 unchanged sentences

The purpose of the JV is to serve the Brazilian market according to the business plan that

Both parties agree to make an initial investment in the JV of $ 198 that will be made per the holding percentage of each

As of the reporting date, the JV is in process of terminating its operations.

Both parties agree to make an initial investment in the JV of $ 198 that will be made per the holding percentage of each party.

March 2024, the Company closed the joint venture (“JV”) in Brazil with Santista Têxtil and liquidating the remaining of its investment of

the years ended December 31, 2024 and 2023, the Company recognized equity loss from the JV in an amount of $ 0 and $ 71 respectively.

3 unchanged sentences

SCHEDULE OF FINANCIAL LIABILITY MATURITIES

Debts with credit institutions

Loans in an amount of $ 80 is bearing interest between Prime to Prime + 1.5 % and is due between March 2025 to February

Loans in an amount of $ 327 is bearing interest between 0.13 %- 0.8 % and is due between December 2024 and June 2028.

with credit institutions

in an amount of $ 48 bearing interest between prime to prime + 1.5 % is due between March 2025 to February 2028.

in an amount of $ 191 bearing interest between 1.5 %- 3.5 % is due between December 2024 and June 2028.

February 2024, the Company received a loan from a commercial lender in an amount of $ 500 .

The loan bears interest at a fix rate of

6 % of the principal and is payable in installments during a six month term.

The Company repaid the loan in full by August

10 - RELATED PARTY TRANSACTIONS

2 unchanged sentences

SCHEDULE OF RELATED PARTY PAYABLES

Other related parties (**)

Other related parties

related parties (**)

related parties

Due to related parties

1 unchanged sentence

amount includes the provision created to former owners of Orgad that are entitled to additional cash and equity consideration and

former owners of Naiz that entitled to additional cash consideration, see note 16- business combination.

former owners of Naiz that entitled to additional cash consideration.

Related parties benefits:

SCHEDULE OF RELATED PARTIES BENEFITS

Salaries and related expenses

Share based payments

Cash liability and equity liability expenses related to acquisitions (**)

and related expenses

based payments

liability and equity liability expenses related to acquisitions (**)

Related parties benefits

amount includes the expenses for a provision created to former owners of Orgad that are entitled to additional cash and equity consideration

and former owners of Naiz that entitled to additional cash consideration, see note 16- business combination.

and former owners of Naiz that are entitled to additional cash consideration.

11 - FINANCIAL INSTRUMENTS

following tables presents the Company’s significant assets and liabilities that are measured at fair value on recurring basis and

following tables present the Company’s significant assets and liabilities that are measured at fair value on recurring basis and

their classification within the fair value hierarchy:

SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

December 31, 2023

Fair value hierarchy

Financial assets

Investment in marketable securities

December 31, 2022

Fair value hierarchy

Financial assets

Investment in marketable securities

Derivatives (*)

December 31, 2022

Fair value hierarchy

Financial liabilities

Warrants derivative

derivatives are included in other receivables.

value hierarchy

in marketable securities

AND ITS SUBSIDIARIES

2 unchanged sentences

11 - FINANCIAL INSTRUMENTS (Cont.)

value hierarchy

in marketable securities

carrying amounts of cash and cash equivalents, restricted cash, short term restricted deposit, accounts receivable, other receivables

and prepaid expenses, trade payable and accounts payable approximate their fair value due to the short-term maturities of such instruments.

December 31, 2023, the recognized loss and fair value (based on quoted market prices with a discount due to security- restrictions on

iMine shares) of the marketable securities were $ 41 and $ 6 , respectively (at December 31, 2022 $ 59 and $ 47 , respectively).

December 31, 2024, the recognized profit (loss) and fair value (based on quoted market prices with a discount due to security

restrictions on iMine shares) of the marketable securities were $ 1

respectively (at December 31, 2023 $( 41 )

respectively).

12 - TAXES ON INCOME

1 unchanged sentence

federal net operating loss carryforwards of approximately $ 28,097 available to reduce future

taxable income:

will expire from 2030 until 2037 and the remain of $ 10,585 may be carryforward to offset against future income for an indefinite period

taxable income of which $ 16,323

will expire from 2025 until 2037 and the

remaining amount of $ 11,774

may be carried forward to offset against

future income for an indefinite period of time.

Utilization of the U.S.

net operating losses may be subject to substantial limitations due to the change of ownership

provisions of the Internal Revenue Code of 1986.

Company has final tax assessments through 2015.

net operating losses may be subject to substantial limitations

due to the change of ownership provisions of the Internal Revenue Code of 1986.

My Size, Inc.

has final tax assessments through 2020.

corporate income tax rate 21%.

2 unchanged sentences

hereunder are the income tax rates relevant to the Company’s Spanish subsidiary:

The Company’s Israeli subsidiaries have estimated

total available operating loss carryforwards of approximately $ 66,000

Company’s Israeli subsidiaries have estimated total available operating loss carryforwards of approximately $ 68,014

as of December 31, 2024.

Of these carryforwards, a

total of $ 42,000

are owned by Topspin Medical (Israel) Ltd.

Topspin’s operating loss carryforwards may be offset only by future income with

respect to the same operational activity by which it was incurred for an indefinite period of time.

The other operating loss

carryforwards are owned by My Size Israel 2014 Ltd and Orgad (subsidiary) may be carryforward to offset against future income for

an indefinite period of time.

Of these carryforwards, a total of $ 40,378

owned by Topspin Medical (Israel) Ltd.

Topspin’s operating loss carryforwards may be offset only by future income with respect

to the same operational activity by which it was incurred for an indefinite period of time.

The other operating loss carryforwards are

owned by My Size Israel 2014 Ltd and Orgad (subsidiary) may be carryforward to offset against future income for an indefinite period

Medical (Israel) Ltd.

1 unchanged sentence

has final tax assessments through 2017.

Naiz has estimated total available operating loss carryforwards of approximately

$ 1,335 as of December 31, 2023.

Naiz operating loss carryforward may be used to offset against future income for an indefinite period

has estimated total available operating loss carryforwards of approximately $ 1,922 as of December 31, 2024.

Naiz’s operating loss carryforward

may be used to offset against future income for an indefinite period of time.

and foreign components of loss, before income taxes consisted of:

9 unchanged sentences

SCHEDULE OF DEFERRED TAX ASSETS

loss carryforwards

based compensation expense

in marketable securities

research and development expenses

temporary differences

deferred tax assets

Operating loss carryforwards

Stock based compensation expense

Investment in marketable securities

Capitalized research and development expenses

Other temporary differences

Total deferred tax assets

Valuation allowance

Net deferred tax assets after valuation allowance

Deferred tax liabilities:

Intangible assets

Net deferred tax liability

deferred tax assets after valuation allowance

tax liabilities:

deferred tax liability

following table presents a reconciliation of the beginning and ending valuation allowance:

SCHEDULE OF RECONCILIATION OF VALUATION ALLOWANCE

Balance at beginning of the year

Additions in valuation allowance to the income statement

Additions in valuation allowance due to exchange rate foreign currency

translation differences

Net change in the valuation allowance

Balance at end of the year

at beginning of the year

in valuation allowance to the income statement

in valuation allowance due to exchange rate foreign currency translation differences

change in the valuation allowance

at end of the year

assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of

5 unchanged sentences

at December 31, 2024 and 2023.

The following presents the adjustment between the theoretical income tax benefit that would result from applying

federal statutory income tax rate to loss before income taxes amount and the reported income tax benefit included in the financial

following presents the adjustment between the theoretical income tax benefit that would result from applying the U.S.

federal statutory

income tax rate to loss before income taxes amount and the reported income tax benefit included in the financial statements:

OF COMPONENTS OF INCOME TAX EXPENSES BENEFITS

Loss before income taxes

Statutory income tax rate

Computed “expected” income tax benefit

Foreign tax rate differences

Exchange rate differences

Nondeductible expenses

Impairment of goodwill

Change in valuation allowance

Income tax benefit

The entire income tax benefit

is a deferred tax benefit.

before income taxes

income tax rate

“expected” income tax benefit

tax rate differences

rate differences

Nondeductible

in valuation allowance

entire income tax benefit is a deferred tax benefit.

AND ITS SUBSIDIARIES

2 unchanged sentences

13 - SHAREHOLDERS’ EQUITY

stock confers upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the

right to receive dividends if declared.

December 7, 2022, the Company’s board of directors approved a 1-for-25 reverse stock split of the Company’s issued and

outstanding shares of common stock.

The reverse stock split became effective on December 8, 2022.

As a result, all shares of common

stock, options for shares of common stock, exercise price and net loss per share amounts were adjusted retroactively for all periods

presented in these financial statements.

On January 10, 2023, the Company entered into a securities purchase agreement pursuant to which the Company sold an aggregate of 162,000 of the Company’s shares of common stock and pre-funded warrants to purchase up to 278,899 shares of common stock and, in a concurrent private placement, unregistered warrants to purchase up to 883,798 shares of common stock, consisting of Series A warrants to purchase up to 441,899 shares of common stock and Series B warrants to purchase up to 441,899 shares of common stock, at an offering price of $ 3.055 per share of common stock and associated Series A and Series B warrants and an offering price of $ 3.054 per pre-funded warrant and associated Series A and Series B warrants.

In addition, the Company entered into a securities purchase agreement (the

“PIPE Purchase Agreement”) pursuant to which the Company agreed to sell and issue in a private placement an aggregate of up

to 540,098 unregistered pre-funded warrants and unregistered warrants to purchase up to an aggregate of 1,080,196 shares of common stock,

consisting of Series A warrants to purchase up to 540,098 shares of common stock and Series B warrants to purchase up to 540,098 shares

of common stock at an offering price of $ 3.054 per pre-funded warrant and associated Series A and Series B warrants.

The pre-funded warrants are immediately exercisable at an exercise price

of $ 0.001 per share and will not expire until exercised in full.

The warrants are immediately exercisable upon issuance at an exercise

price of $ 2.805 per share, subject to adjustment as set forth therein.

The Series A warrants have a term of five and one-half years from

the date of issuance and the Series B warrants have a term of 28 months from the date of issuance.

The warrants may be exercised on a

cashless basis if there is no effective registration statement registering the shares underlying the warrants.

In connection with the PIPE Purchase Agreement, the Company entered into

a registration rights agreement (the “Registration Rights Agreement”).

Pursuant to the Registration Rights Agreement, the

Company is required to file a resale registration statement (the “Registration Statement”), with the SEC, to register for

resale the shares issuable upon exercise of the unregistered pre-funded warrants and the Series A and Series B warrants, within 20 days

of the signing date of the PIPE Purchase Agreement (the “Signing Date”), and to have such Registration Statement declared

effective within 60 days after the Signing Date in the event the Registration Statement is not reviewed by the SEC, or 90 days of the

Signing Date in the event the Registration Statement is reviewed by the SEC.

The Company will be obligated to pay certain liquidated damages

if it fails to maintain the effectiveness of the Registration Statement.

Aggregate gross proceeds to the Company in respect of the offerings was

approximately $ 3,000 , before deducting fees payable to the placement agent and other offering expenses payable by the Company.

proceeds were approximately $ 2,600 .

As of December 31, 2023, all the pre funded warrants were exercised.

On August 24, 2023, the Company entered into an inducement offer letter

agreement (the “Inducement Letter”) with a certain holder (the “Holder”) of certain of the Company’s existing

warrants to purchase up to (i) 1,963,994 shares of the Company’s common stock issued on January 12, 2023 at an exercise price of

$ 2.805 per share (the “January 2023 Warrants”), (ii) 6,864 shares of the Company’s common stock issued on January 17,

2020 at an exercise price of $ 94.00 per share (the “January 2020 Warrants”), and (ii) 47,153 shares of the Company’s

common stock issued on October 28, 2021 at an exercise price of $ 31.50 per share, having terms ranging from 28 months to five and one-half

years (the “October 2021 Warrants” and together with the January 2023 Warrants and the January 2020 Warrants, the “Existing

Pursuant to the Inducement Letter, the Holder agreed to exercise for cash

its Existing Warrants to purchase an aggregate of 2,018,012 shares of the Company’s common stock at a reduced exercise price of

$ 2.09 per share in consideration of the Company’s agreement to issue new common stock purchase warrants (the “New Warrants”),

to purchase up to an aggregate of 5,367,912 shares of the Company’s common stock (the “New Warrant Shares”), at an exercise

price of $ 2.09 per share.

The Company received aggregate gross proceeds of approximately $ 4.2 million from the exercise of the Existing

Warrants by the Holder, before deducting placement agent fees and other offering expenses payable by the Company.

The net proceeds are

approximately $ 3.6 million.

As of December 31, 2023, the Company issued to the holder 1,183,012 shares

and 835,000 in abeyance.

stock confers upon their holders the right to receive notice to participate and vote in general

meetings of the Company, and the right to receive dividends if declared.

April 19, 2024, the Company effected a one-for-eight reverse stock split of its common stock

(the “Reverse Stock Split”) with the Company’s shares beginning trading

on a post-split basis on the Nasdaq Capital Market on April 23, 2024.

Upon the effectiveness

of the Reverse Stock Split, every eight shares of the Company’s issued and outstanding

common stock was automatically converted into one share of common stock, without any change

in the par value per share.

In addition, a proportionate adjustment was made to the per share

exercise price and the number of shares issuable upon the exercise of all outstanding options

and warrants entitling the holders to purchase common stock.

Any fraction of a share of common

stock that would otherwise have resulted from the Reverse Stock Split was rounded up to the

next whole number.

All the per-share data was adjusted to

give retroactive effect of 1:8 reverse stock split effected in April 2024.

August 24, 2023, the Company entered into an inducement offer letter agreement (the “2023 Inducement Letter”) with a

certain holder of certain of the Company’s existing warrants to purchase up to (i) 1,963,994

shares of the Company’s common stock issued on January 12, 2023 at an exercise price of $ 2.805

per share (the “January 2023 Warrants”), (ii) 6,864

shares of the Company’s common stock issued on January 17, 2020 at an exercise price of $ 94.00

per share (the “January 2020 Warrants”), and (ii) 47,153

shares of the Company’s common stock issued on October 28, 2021 at an exercise price of $ 31.50

per share, having terms ranging from 28 months to five and one-half years (the “October 2021 Warrants” and together with

the January 2023 Warrants and the January 2020 Warrants, the “2023 Existing Warrants).

Pursuant to the 2023 Inducement Letter,

the holder agreed to exercise for cash its 2023 Existing Warrants to purchase an aggregate of 2,018,012

shares of the Company’s common stock at a reduced exercise price of $ 2.09

per share in consideration of the Company’s agreement to issue new common stock purchase warrants to purchase up to an

aggregate of 5,367,912

shares of the Company’s common stock at an exercise price of $ 2.09

The Company received aggregate gross proceeds of approximately $ 4.2

million from the exercise of the 2023 Existing Warrants by the holder, before deducting placement agent fees and other offering

expenses payable by the Company.

The net proceeds were approximately $ 3.6

As of December 31, 2024, the Company issued to the holder all of the exercised shares.

May 16, 2024, the Company entered into an inducement offer letter agreement (the “2024 Inducement Letter”) with a

certain holder of certain of the Company’s existing warrants to purchase up to (i) 326,514

shares of the Company’s common stock issued on August 28, 2023 with a twenty-eight month term at an exercise price of $ 16.72

per share, and (ii) 344,475

shares of the Company’s common stock issued on August 28, 2023 with a five and one-half year term at an exercise price of

per share, ((i) and (ii) collectively, the “ 2024 Existing Warrants).

to the 2024 Inducement Letter, the holder agreed to exercise for cash its 2024 Existing Warrants to purchase an aggregate of 670,989

shares of the Company’s common stock at a reduced exercise price of $ 4.86

per share in consideration of the Company’s agreement to issue new common stock purchase warrants to purchase up to an

aggregate of 1,341,978

shares of the Company’s common stock, at an exercise price of $ 4.61

The Company received aggregate gross proceeds of approximately $ 3.26

million from the exercise of the 2024 Existing Warrants by the Holder, before deducting placement agent fees and other offering

expenses payable by the Company.

As of December 31, 2024, the Company issued to the holder all of the shares exercised.

December 27, 2024, the holder exercised warrants to purchase 653,028 shares of common stock of the Company resulting in gross proceeds

of approximately $ 3.0 million.

AND ITS SUBSIDIARIES

4 unchanged sentences

OF WARRANT ACTIVITY

Outstanding, December 31, 2021

Expired or exercised

Outstanding, December 31, 2022

Expired or exercised

December 31, 2022

December 31, 2023

( 1,328,639 )

Outstanding, December 31, 2023

Exercisable, December 31, 2023

December 31, 2024

14 - STOCK BASED COMPENSATION

stock-based expense recognized in the financial statements for services received is related to Research and Development, Sales and Marketing

and General and Administrative expenses as shown in the following table:

stock-based expense recognized in the financial statements for services received is related to cost of goods, research and

development, sales and marketing and general and administrative expenses as shown in the following table:

OF STOCK BASED COMPENSATION EXPENSES

Stock-based compensation expense – Cost of goods

Stock-based compensation expense - Research and development

Stock-based compensation expense - Sales and marketing

Stock-based compensation expense - General and administrative

compensation expense – Cost of goods

compensation expense - Research and development

compensation expense - Sales and marketing

compensation expense - General and administrative

Stock-based compensation

4 unchanged sentences

issued to consultants

July 2019, the Company entered into a three-year agreement with a consultant (“Consultant14”) to provide services to

the Company including assisting the Company to promote, market and sell the Company’s technology to potential customers.

to such agreement and in partial consideration for such consulting services, the Company agreed to issue to Consultant14 options

to purchase up to 107 shares of the Company’s common stock upon execution of the agreement.

The options are exercisable at

$ 375.00 per share and shall vest in 3 equal instalments every twelve months starting July 2019.

Unexercised options shall expire

4 years from the effective date.

addition, the Company agreed to issue to Consultant14 options to purchase up to 890 shares of the Company’s common stock upon

execution of the agreement.

The options are exercisable at $ 27.00 per share and shall vest in 4 equal instalments every six months

starting September 2020.

Unexercised options shall expire 5 years from the effective date.

In March 2023, the Company entered into a two-year agreement with a consultant (“Consultant15”) to provide

services to the Company including assisting the Company to promote, market and sell the Company’s technology to potential customers.

Pursuant to such agreement and in partial consideration for such consulting services, the Company agreed to issue to Consultant15 options

to purchase up to 4,000 shares of the Company’s common stock upon execution of the agreement.

March 2023, the Company entered into a two-year agreement with a consultant to provide services to the Company including assisting

the Company to promote, market and sell the Company’s technology to potential customers.

Pursuant to such agreement and in

partial consideration for such consulting services, the Company agreed to issue to the consultant options to purchase up to 500 shares

of the Company’s common stock upon execution of the agreement.

The options are exercisable at $ 24.00

per share and shall vest in 2 equal instalments every twelve months starting March 2023.

Unexercised options shall expire 3 years from

the effective date.

During 2023 and 2022, an

amount of $ 1

respectively, were recorded by the Company as stock-based equity awards with respect to Consultant 14 and consultant 15.

per share and shall vest in two equal instalments every twelve months starting March 2023.

Unexercised options shall expire 3 years

from the effective date.

July 2023, the Company entered into a six month agreement with a consultant to provide services to the Company, including

assisting the Company to promote, market and sell the Company’s technology to potential

customers and make strategic introductions and inquiries with interested parties in the financial

Pursuant to the agreement and in partial consideration for such consulting

services, the Company issued to the consultant (i) 5,000 shares of restricted common stock

of the Company, (ii) a warrant to purchase 12,500 shares of common stock at an exercise price

of $4.00 per share and exercisable for a term of 36 months from the date of issuance, and

(iii) a warrant to purchase 12,500 shares of common stock at an exercise price of $6.00 per

share and exercisable for a term of 36 months from the date of issuance.

issuance was approved by the Company’s board of directors in February 2024.

the year ended December 31, 2024, the Company recorded $ 71 , as stock-based equity awards with respect to the consultant.

were recorded in the fiscal year ended December 31, 2023 with respect to the consultant.

AND ITS SUBSIDIARIES

4 unchanged sentences

OF OPTIONS GRANTED TO CONSULTANTS

Issuance date

exercise price

September-October

October 2024- September 2025

Company uses the Black Scholes model to measure the fair value of the stock options with the assistance of a third party valuation.

1 unchanged sentence

OF FAIR VALUE ASSUMPTIONS OF STOCK OPTIONS

Dividend yield

Expected volatility

Risk-free interest

Contractual term of up to (years)

term of up to (years)

AND ITS SUBSIDIARIES

15 unchanged sentences

OF FAIR VALUE ASSUMPTIONS OF STOCK OPTIONS

Dividend yield

Expected volatility

Risk-free interest

Contractual term

the years ended December 31, 2024 and 2023, 6,875 and 11,625 options, respectively, were granted.

1 unchanged sentence

Plan from 36,125 shares to 130,000 shares.

September 29, 2022, the Compensation Committee of the Company approved grants of restricted share awards under the Company’s 2017

Equity Incentive Plan to Ronen Luzon (CEO), Or Kles (CFO), Billy Pardo (COO), Ilia Turchinsky (CTO) and Ezequiel Javier Brandwain (CCO),

pursuant to which were issued 100,000 restricted shares, 24,000 restricted shares, 24,000 restricted shares, 16,000 restricted shares

and 12,000 restricted shares, respectively.

Each restricted share awarded under section 102 Capital Gain Restricted Stock Award Agreement

(the “Agreement”).

The restricted shares shall vest in three equal installments on January 1, 2023, January 1, 2024 and January

1, 2025 for Ronen Luzon, Or Kles, Billy Pardo and Ilia Turchinsky and on January 27, 2023, January 27, 2024 and January 27, 2025 for

Ezequiel Javier Brandwain, conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change

in control of the Company.

the same day, the Company granted five-years options to purchase up to 10,000 ordinary shares to other employees of the Company at an

exercise price of $ 0.21 per share.

The options vesting period is over three years in three equal portions from the vesting commencement

On July 13, 2023, the

compensation committee of the board of directors of the Company reduced the exercise price of outstanding options of certain

officers and directors of the Company for the purchase of an aggregate of 23,575 shares of common stock (with exercise

prices of $ 26.00 per Share) to $ 1.09 per share, which was the closing price for the Company’s shares on July 13,

The exercise price reduction includes options held by, among others, the Company’s named executive officers with respect

to the following number of shares:

(i) Ronen Luzon, the Company’s Chief Executive Officer and director:

8,001 shares,

(ii) Or Kles, the Company’s Chief Financial Officer:

5,760 shares, and (iii) Billy Pardo, the Company’s Chief

Operating Officer and Chief Product Officer:

6,094 shares.

The incremental compensation cost

resulting from the repricing is approximately $ 10 .

addition, The Company granted five-year options to purchase up to 93,000 ordinary shares to employees of the Company at an exercise

price of $ 1.09 per share.

On February 14, 2024, the Compensation Committee of the Company granted restricted share awards under the Company’s

2017 Equity Incentive Plan to Ronen Luzon, Or Kles and Billy Pardo, pursuant to which they were issued 300,000 restricted shares, 150,000

restricted shares and 150,000 restricted shares, respectively.

The restricted shares shall vest in three equal installments on January 1, 2025, January

1,2026 and January 1, 2027, conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change

in control of the Company.

February 14, 2024, the Compensation Committee of the Company granted restricted share awards under the Company’s 2017 Equity Incentive

Plan to Ronen Luzon, Or Kles and Billy Pardo, pursuant to which they were issued 37,500 restricted shares, 18,750 restricted shares and

18,750 restricted shares, respectively.

The restricted shares vest in three equal instalments on January 1, 2025, January 1,2026

and January 1, 2027, conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change in control

of the Company.

AND ITS SUBSIDIARIES

12 unchanged sentences

OF SHARES OPTION ACTIVITY

Outstanding at January 1

Outstanding at year end

Vested at year end

option activity during 2023 is as follows:

Outstanding at January 1

Outstanding at year end

Vested at year end

AND ITS SUBSIDIARIES

2 unchanged sentences

15 - CONTINGENCIES AND COMMITMENTS

August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”) in the Supreme Court of the

State of New York, County of New York for breach of a Securities Purchase Agreement (the “Agreement”) in which it is

seeking damages in an amount to be determined at trial, but in no event less than $ 616 .

On August 2, 2018, North Empire filed a Summons

with Notice against the Company, also in the same Court, in which they allege damages in an amount of $ 11,400 arising from an alleged

breach of the Agreement.

On September 6, 2018 North Empire filed a Notice of Discontinuance of the action it had filed on August

On September 27, 2018, North Empire filed an answer and asserted counterclaims in the action commenced by the Company against

them, alleging that the Company failed to deliver stock certificates to North Empire causing damage to North Empire in the amount

of $ 10,958 .

North Empire also filed a third-party complaint against the Company’s CEO and now former Chairman of the Board

asserting similar claims against them in their individual capacities.

On October 17, 2018, the Company filed a reply to North Empire’s

counterclaims.

On November 15, 2018, the Company’s CEO and now former Chairman of the Board filed a motion to dismiss North

Empire’s third-party complaint.

On January 6, 2020, the Court granted the motion and dismissed the third-party complaint.

has been completed and both parties have filed motions for summary judgment in connection with the claims and counterclaims.

30, 2021, the Court denied both the Company and North Empire’s motions for summary judgment, arguing there were factual issues

to be determined at trial.

On January 26, 2022, the Company filed a notice of appeal of the summary judgment decision.

3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s motion for summary judgment.

North Empire will file its opposition papers on or before March 31, 2022, and the Company will file reply papers on April 29, 2022.

On or about September 12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.

filed its opposing brief on December 7, 2022.

Both sides were given an opportunity to file a reply brief.

The Company filed a reply

brief on January 4, 2023 and North Empire filed its reply brief on January 13, 2023.

The Appellate Court has scheduled oral argument

for the appeal for February 7, 2023.

Oral argument was held before the Appellate Court on February 7, 2023.

On or about February

28, 2023, the Appellate Court filed its Decision and Order, which affirmed the lower court’s decisions regarding both the Company

and North Empire’s motions for summary judgment and sent the case back to the Supreme Court.

On March 13, 2023, the Supreme

Court referred the case to its Alternative Dispute Program and ordered the cases to mediate.

The mediation was held on July 26, 2023 and

various settlement options were explored but the mediation did not lead to settlement.

On December 21, 2023, a conference with the Court

was held and the parties were given dates for various pre-trial filings.

The next pre-trial conference is scheduled to be held on May 31, 2024, at

which point the Court will schedule the matter for trial on the ultimate claims.

The Company intends to vigorously defend any claims made

by North Empire.

The Company believes it is more likely than not that the counterclaims will be denied.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share data and per share data)

16 - BUSINESS COMBINATIONS

February 7, 2022, the Company acquired 100 % of the shares and voting interests in Orgad an omnichannel e-commerce platform.

The acquisition

was designed to create an additional revenue stream for the Company by becoming a direct e-commerce seller while leveraging the synergies

between MySizeID and Orgad’s e-commerce platform.

pro-forma information

results of operations of Orgad have been included in the consolidated financial statements since the acquisition date of February 7,

Orgad revenues included in the Company’s consolidated statement of operations from February 7, 2022 through December 31,

2022 were $ 4,132 .

If the acquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for

the year ended December 31 2022 and 2021 would have been $ 4,662 and $ 2,850 respectively, and the net loss after tax would have been $ 8,519

and $ 10,149 respectively.

Consideration

following table summarizes the acquisition date fair value of each major class of consideration:

OF FAIR VALUE OF THE ACQUISITION

Issuance of shares of common stock ( 55,801

Total consideration transferred

Quoted price as of the acquisition date

In addition, the Company agreed

to pay to the former owners of Orgad, on the two-year and the three-year anniversary of the closing, $ 350

in each of these years provided that in the case of the second and third instalments certain revenue targets are met and subject

further to certain downward post-closing adjustment.

Subsequent to the balance sheet date, the amount of $ 700 was fully paid to the

former owners of Orgad net of a settlement amount of $ 275 .

Furthermore, 55,801

shares of common stock will be issued in eight equal quarterly instalments until the lapse of two years from closing.

earn-out payments of 10 %

of the operating profit of Orgad for the years 2022 and 2023 will also be paid.

All of these payments are subject to the former

owners being actively engaged with Orgad at the date such payment is due, and therefore were not taken as part of the consideration

for the business combination.

the years ended December 31, 2023 and 2022 an amount of $ 202 ,

$ 82 and $ 319

was recorded in respect of the cash instalments and in respect of stocks issuance, respectively in Cost Of Goods, Sales and

Marketing and General and Administrative expenses as shown in the following table:

OF STOCK BASED COMPENSATION EXPENSES

Expenses – Cost of goods

Expenses - Sales and marketing

Expenses - General and administrative

Stock-based compensation

Identifiable assets

acquired and liabilities assumed

the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities

assumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques

based on estimates and assumptions made by management at the time of the acquisition.

following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:

OF FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES

Cash and Cash Equivalent

Trade receivables

Long-term financial investment

Selling platform

Short-term accruals and deferrals

Trade payables

Long term provision

Long-term debt

Deferred tax liabilities

Total net assets acquired

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share data and per share data)

16 - BUSINESS COMBINATION (Cont.)

Acquisition-related

Company incurred transaction costs of approximately none and $ 40

and during twelve-month period ended December 31, 2023 and 2022 respectively, which were included in general and administrative

expenses in the consolidated statements of income (loss).

of N aiz Bespoke Technologies, S.L.

October 11, 2022, the Company acquired 100 % of the shares and voting interests in Naiz a provider of SaaS technology solutions that solve

size and fit issues for fashion ecommerce companies.

The acquisition was designed to allow Naiz’s customers benefit from MySize’s

deep understanding of the fashion ecommerce retail landscape, while creating an additional revenue stream for the Company.

pro-forma information

results of operations of Naiz have been included in the consolidated financial statements since the acquisition date of October 11, 2022.

Naiz revenues included in the Company’s consolidated statement of operations from October 11, 2022 through December 31, 2022 were

If the acquisition had occurred on January 1, 2021, management estimates that the consolidated pro forma revenues for the year

ended December 31 2022 and 2021 would have been $ 4,738 and $ 379 respectively and the net loss after tax would have been $ 8,695 and $ 10,717

respectively.

Consideration transferred

following table summarizes the acquisition date fair value of each major class of consideration:

OF FAIR VALUE OF THE ACQUISITION

Issuance of shares of common stock ( 240,000 shares) (*)

Total consideration transferred

Quoted price as of the acquisition date

addition, the Company agreed to pay to the former owners of Naiz, additional cash consideration (up to $ 1,550 ) in four instalments subject

to the following conditions:

Continuing employment or

involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz, except if terminated as a result of a Good

Naiz’s Revenues reaching

or exceeding the respective Target Revenues defined in the agreement.

The revenues will be calculated in four periods:

1, 2022 – December 31, 2022;

(2) January 1, 2023 – June 30, 2023;

(3) July 1, 2023 – December 31, 2023;

1, 2024 – December 31, 2024.

owners of Naiz are entitled to additional cash consideration following December 31, 2025 (up to $1,650) in an event when the actual value

of the equity consideration is less than $1,650, subject to completion of a Target Revenue for the period of January 1, 2025 –

December 31, 2025 and continuing employment or involvement of the Key Persons of Naiz (as defined in the agreement) by or with Naiz,

except if terminated as a result of a Good Reason ;

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share data and per share data)

16 - BUSINESS COMBINATION (Cont.)

the year ended December 31, 2023 and 2022 an amount

of ($ 130 ) and $ 283

was recorded in respect of the additional cash consideration respectively.

has reached the Revenues target of (1) period January 1, 2022-December 31,2022 and therefore an amount of $ 125 was paid during the year

has not reached the targets of the (2) and (3) periods and therefore the contingent liability was reduced accordingly.

Identifiable assets

acquired and liabilities assumed

the purchase price allocation, the Company allocated the purchase price to tangible and identified intangible assets acquired and liabilities

assumed based on the estimates of their fair values, which were determined using generally accepted valuation techniques based on estimates

and assumptions made by management at the time of the acquisition.

following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:

OF FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES

Cash and cash equivalent

Trade receivables and other receivables

Long-term financial investment

Customer Relationships

Short Term accruals and deferrals

Trade payables

Short-term provision

Short term debt

Long term debt

Deferred tax liabilities

Total net assets acquired

Acquisition-related

2022, the Company incurred transaction costs of approximately $ 75 which were included in general and administrative expenses in the consolidated

statements of income (loss).

August 7, 2018, the Company commenced an action against North Empire LLC (“North Empire”)

in the Supreme Court of the State of New York, County of New York for breach of a Securities

Purchase Agreement in which it sought damages in an amount

to be determined at trial, but in no event less than $ 616 .

On August 2, 2018, North Empire

filed a Summons with Notice against the Company, also in the same Court, in which they alleged

damages in an amount of $ 11,400 arising from an alleged breach of the Agreement.

6, 2018 North Empire filed a Notice of Discontinuance of the action it had filed on August

On September 27, 2018, North Empire filed an answer and asserted counterclaims in

the action commenced by the Company against them, alleging that the Company failed to deliver

stock certificates to North Empire causing damage to North Empire in the amount of $ 10,958 .

North Empire also filed a third-party complaint against the Company’s CEO and former

Chairman of the Board asserting similar claims against them in their individual capacities.

On October 17, 2018, the Company filed a reply to North Empire’s counterclaims.

November 15, 2018, the Company’s CEO and former Chairman of the Board filed a motion

to dismiss North Empire’s third-party complaint.

On January 6, 2020, the Court granted

the motion and dismissed the third-party complaint.

Discovery has been completed and both

parties filed motions for summary judgment in connection with the claims and counterclaims.

On December 30, 2021, the Court denied both the Company and North Empire’s motions

for summary judgment, arguing there were factual issues to be determined at trial.

26, 2022, the Company filed a notice of appeal of the summary judgment decision.

3, 2022, the Company filed a motion to reargue the Court’s decision denying the Company’s

motion for summary judgment.

On or about September

12, 2022, the Court issued its Decision and Order denying the Company’s motion to reargue.

North Empire filed its opposing brief on December 7, 2022.

Both sides were given an opportunity

to file a reply brief.

The Company filed a reply brief on January 4, 2023 and North Empire

filed its reply brief on January 13, 2023.

Oral argument was held before the Appellate Court on

February 7, 2023.

On or about February 28, 2023, the Appellate Court filed its Decision and

Order, which affirmed the lower court’s decisions regarding both the Company and North

Empire’s motions for summary judgment and sent the case back to the Supreme Court.

On March 13, 2023, the Supreme Court referred the case to its Alternative Dispute Program

and ordered the cases to mediate.

The mediation was held on July 26, 2023 and various settlement

options were explored but the mediation did not lead to settlement.

On December 21, 2023,

a conference with the Court was held and the parties were given dates for various pre-trial

parties agreed on settlement terms, including a global settlement with a third party with related claims.

On November 19, 2024, the

settlement agreement was executed and on December 2, 2024, the parties filed the Stipulation of Discontinuance with the Court and

the action was dismissed.

Company did not recognize any a loss or expenses from the settlement agreement.

July 2024, the Company was served with a legal complaint filed by Shimon Shukron in the Magistrate’s Court in Herzliya for a

monetary award in an amount of NIS 1,895,345

(approximately $ 510 ).

The plaintiff alleges that due to the fire that broke out at Orgad’s warehouse in January 2023, the fire spread to the

plaintiff’s business and caused heavy damage to the structure and contents, inventory of the business and loss of profits.

Company filed its statement of defense in September 2024.

At this preliminary stage, the plaintiff did not provide sufficient

documents to support his claims regarding the extent of the alleged damage.

The Company and the plaintiff agreed to go to mediation

and are waiting for a suitable date to be set.

The Company cannot

evaluate the chances of the mediation or the claim to succeed.

AND ITS SUBSIDIARIES

2 unchanged sentences

16 – Operating Segments

1, July 2023 the Company merged its two SAAS segments into one segment, hence reducing the reportable segments from three to the following

two segments:

Company reports its financial results for the two reportable

(i) fashion and equipment e-commerce platform, and (ii) SaaS based innovative artificial intelligence driven measurement

This realignment reflects the way resources are allocated and performance is assessed by the Chief Operating Decision Maker.

The fashion and equipment e-commerce platform which represents Orgad’s activity that was acquired by the Company in 2022, mainly

operates on Amazon.

The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS Solutions operating segment

consists of My Size Inc, My Size Israel, My Size LLC and Naiz.

the Company’s financial reporting for December 31, 2023, comparative information for 2022 was restated to reflect the changes in

reportable segments.

The Company chief executive officer who is the Chief Operating Decision Maker (“CODM”) reviews, accompanied

by disaggregated information about revenues and contributed profit by the two identified reportable segments.

The fashion and

equipment e-commerce platform which represents Orgad’s activity that was acquired by the Company in 2022, mainly operates on

The SaaS based innovative artificial intelligence driven measurement solutions, or SaaS Solutions operating segment consists

of My Size Inc, My Size Israel, My Size LLC and Naiz.

The Company operating segments are the same as its reportable segments.

C ODM reviews total operating expenses and consolidated

net loss to assess performance, forecast future financial results and allocate resources.

In assessing the Company’s financial

performance and making strategic decisions, the C ODM

regularly reviews segment loss and operating expenses by function.

This includes a review of budget versus actual expenses and cost of

goods, sales and marketing salaries and other segment expenses.

For the fashion and equipment e-commerce platform operating segment

the CODM also reviews gross profit and Amazon fees.

For the SaaS Solutions operating segment, the CODM also reviews research and development

costs of goods and other costs and expenses are generally directly attributed to the segments.

These expenses include research

and development related expenses, costs of Amazon fees, cost of goods, and legal-related costs.

Indirect costs are allocated to segments

based on a reasonable allocation methodology, when such costs are significant to the performance measures of the operating segments.

Indirect operating expenses, such as insurance, legal and audit services, mostly allocated based on revenues, most of which is allocated

to the fashion and equipment e-commerce platform segment.

related to the operations of the Company’s reportable operating segments is set forth below:

OF REPORTABLE OPERATING SEGMENTS

Fashion and equipment e-commerce platform

As of the year ended December 31, 2023

Revenues from external customers

Operating (loss) income

Significant non-cash items:

Amortization (*)

and equipment

of the year ended December 31, 2024

from external customers

Cost of revenues

Research and development expenses

Sales and marketing Salaries

Impairment of goodwill

(*) see note 7.

Fashion and equipment e-commerce platform

As of December 31, 2023:

Fashion and equipment e-commerce platform

As of the year ended December 31, 2022

Revenues from external customers

Operating (loss) income

Significant non-cash items:

Amortization (*)

Other Segment Items (*)

Reconciliation of Profit or Loss

Financial income (expense), net

Loss before income taxes

non-cash items:

Other Income ( *** )

of goodwill (**)

Share based payments

segments items include shared based payments, rent and related expenses, professional services, insurance and other expenses.

See Note 2 0 .

Fashion and equipment e-commerce platform

As of December 31, 2022:

The Company elected to present geographic information

in respect with revenues generated from external customers based on the selling location:

assets, which includes investment in JV, property, plant and equipment and right

of use assets, by geographic region are as follows :

and equipment

of December 31, 2024:

and equipment

of the year ended December 31, 2023

from external customers

Cost of revenues

Research and development expenses

Sales and marketing Salaries

Impairment of goodwill

Other Segment Items (*)

Reconciliation of Profit or Loss

income (expense), net

Equity loss of equity method investees

Loss before income taxes

non-cash items:

of goodwill (**)

Share based payments

Other segments items include shared based payments, rent and related expenses, professional services, insurance

and other expenses.

and equipment

of December 31, 2023:

Company elected to present geographic information in respect with revenues generated from external customers based on the selling location.

assets, which includes investment in JV, property, plant and equipment and right of use assets, by geographic region are as follows:

SCHEDULE OF CONSOLIDATED ASSETS

For the year ended December 31, 2023 86.45 % of the Company’s total revenues were generated

in the United states, no other foreign destination comprised 10.0% or more of the Company’s total revenues.

the year ended December 31, 2024, 91.64 % of the Company’s total revenues were generated in the United states, no other foreign destination

comprised 10.0% or more of the Company’s total revenues.

the year ended December 31, 2023, 86.45 % of the Company’s total revenues were generated in the United states, no other foreign destination

comprised 10.0% or more of the Company’s total revenues.

AND ITS SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share data and per share data)

17 - SALES AND MARKETING

1 unchanged sentence

Consultants and subcontractors

Cash and equity liability expenses related to Orgad acquisition (*) *

Cash and equity liability expenses related

to Orgad acquisition

Share based payments for consultants and employees

Sales and marketing expenses

(*) See note 16.

18 - GENERAL AND ADMINISTRATIVE EXPENSES

OF GENERAL AND ADMINISTRATIVE EXPENSES

Professional services

Share based payments for consultants, directors and employees

Rent, office expenses and communication

Cash liability and equity liability expenses related to Orgad acquisition (*) *

Cash liability expenses related to Naiz acquisition (*)

based payments for consultants, directors and employees

office expenses and communication

liability and equity liability expenses related to Orgad acquisition (*)

liability expenses related to Naiz acquisition (*)

General and administrative

(*) See note 16.

19 - FINANCIAL INCOME (EXPENSE), NET

OF FINANCIAL INCOME (EXPENSES), NET

rate differences

Financial income

AND ITS SUBSIDIARIES

1 unchanged sentence

dollars in thousands (except share data and per share data)

20 - FINANCIAL INCOME (EXPENSE), NET

OF FINANCIAL INCOME (EXPENSES), NET

Exchange rate differences

Total Financial income

Exchange rate differences

Revaluation of loan granted

Revaluation investment in marketable securities

Total Financial expense

19 - FINANCIAL INCOME (EXPENSE), NET (Cont.)

rate differences

of loan granted

investment in marketable securities

Financial expense

20 – SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

January 2, 2023, Orgad experienced a fire at its warehouse in Israel.

The Company is not aware of any casualties or injuries associated

with the fire.

The Company shifted Orgad’s operation to its headquarters.

The value of the inventory that was in the warehouse

was approximately $ 640 .

The Company believes that this incident did not affect the future sales results of Orgad for the year of

The inventory was not insured and the Company and lessor signed an agreement to settle the issue in which the Company paid

to the lessor an amount of $ 50 to cover its loss.

The Company recognized the payment to the lessor as a general and administrative

the reporting period, claims by the owners a neighboring warehouse were made of damage caused by the fire.

As of the date these financial

statements were authorized for issuance, no lawsuit was filed against the Company, and the amount of potential loss, if any, cannot

be reasonably estimated.

During May 2023, the Company

initiated a transfer of the support, development and customer success operations to its Spanish entity, Naiz Fit, that is intended

to improve efficiency and lower costs between the Company’s operations in Israel and Naiz Fit.

As part of this, the Company

reduced headcount by 13 persons in Israel, including the termination of its Chief Commercial Officer, Ezequiel Javier Brandwain.

This restructuring did not have a material impact on the Company’s results.

The Company expects it to lower future operating

costs without significant impact on revenues.

On November 3, 2023, the

Company was notified, by the Nasdaq Listing Qualifications that the Company is not in compliance with the minimum bid price requirements

set forth in Nasdaq Listing Rule 5550(a)(2), or the Rule, for continued listing on The Nasdaq Capital Market.

The Notification Letter

provides that the Company has 180 calendar days, or until May 1, 2024, to regain compliance with the Rule.

To regain compliance,

the bid price of our common stock must have a closing bid price of at least $ 1.00 per share for a minimum of 10 consecutive business

In the event we do not regain compliance by July 5, 2022, the Company may then be eligible for additional 180 days if the Company

meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq

Capital Market, with the exception of the bid price requirement, and will need to provide written notice of the Company’s intention

to cure the deficiency during the second compliance period.

If the Company does not qualify for the second compliance period or fails

to regain compliance during the second compliance period, then Nasdaq will notify the Company of its determination to delist the

Company common stock, at which point the Company will have an opportunity to appeal the delisting determination to a Hearings Panel.

On February 7,

2022, the Company acquired 100 %

of the shares and voting interests in Orgad an omnichannel e-commerce platform.

The Company agreed to pay to the former owners of

Orgad cash consideration of $ 300

and issuance of shares of common stock.

In addition, the

Company agreed to pay to the former owners of Orgad on the two-year and the three-year anniversary of the closing of the transaction

pursuant to which the Company acquired 100 %

of the shares and voting interests in Orgad, $ 350

in each of these years, provided that in the case of the second and third instalments certain revenue targets are met and subject

further to certain downward post-closing adjustment.

In February 2024, the amount of $ 700

was fully paid to the former owners of Orgad net of a settlement amount of $ 275

which was recorded as other income.

Towards the end of 2023, the Company negotiated with the sellers to reduce the amounts owed to them, based on the fact that the actual

working capital was different from that reflected in the financial statements attached to the contract.

The gaps were mainly from provision

for customer returns and value of the inventory.

In a settlement agreement between the parties signed on February 2024, it was determined

that the sellers would waive an amount of $ 275 .

November 3, 2023, the Company was notified, by the Nasdaq Listing Qualifications that the Company is not in compliance with the minimum

bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) (the “Rule”) for continued listing on the Nasdaq.

The Notification Letter provided that the Company had 180 calendar days, or until May 1, 2024, to regain compliance with the Rule.

To regain compliance, the bid price of the Company’s common stock must have had a closing bid price of at least $1.00 per share

for a minimum of 10 consecutive business days.

On May 7, 2024, the Company received a letter from Nasdaq that, for the 10 consecutive

business days from April 23, 2024 to May 6, 2024, the closing bid price of the Company’s common stock had been at $1.00 per

share or greater.

Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq considers the prior

bid price deficiency matter now closed.

21 - EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

February 14, 2024, the Compensation Committee of the Company granted restricted stock awards under the Company’s 2017 Equity

Incentive Plan to Ronen Luzon, Or Kles and Billy Pardo, pursuant to which they were issued 300,000

restricted shares, 150,000

restricted shares and 150,000

restricted shares, respectively.

The restricted shares shall vest in three equal installments on January 1, 2025, January 1, 2026

and January 1, 2027, conditioned upon continuous employment with the Company, and subject to accelerated vesting upon a change in

control of the Company.

On the same day, the Company granted a total of 80,000 RSU (restricted stock units) to its Directors that will vest

on January 1,2025 and five -years options to purchase up to 55,000 ordinary shares to other employees of the Company at an exercise price

of $ 0.479 per share.

The options vesting period is over three years in three equal portions from the vesting commencement date.

On January 21,

2025, the Company entered into an At The Market Offering Agreement (the “Offering Agreement”), with H.C.

Wainwright & Co., LLC, pursuant to which the

Company may offer and sell, from time to time through Wainwright shares of the Company’s common stock having an aggregate

offering price of up to $ 4.1

The Company is not obligated to make any sales

of the shares under the Offering Agreement.

The offering of shares pursuant to the Offering Agreement will terminate upon the earliest

of (a) the sale of all of the shares subject to the Offering Agreement and (b) the termination of the Offering Agreement by Wainwright

or the Company, as permitted therein.

The Company agreed to pay to Wainwright a cash commission of 3 % of the gross sales price of any Common Stock sold under

the Offering Agreement and has agreed to provide.

As of March 10, 2025, the Company

shares pursuant to the Offering Agreement for aggregate gross proceeds of approximately $ 142 .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data